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Inflation at 5.91% for Dec-27 Week

January 9, 2009

Inflation continues to come down even as monetary authorities follow a liberal credit policy to halt the slowdown in economy. The wholesale price index (WPI) registered a decline of 0.3% to 229.5 for week ended December 27. Rate of increase in prices or inflation stood at 5.91% in the said week compared to 6.38% in the previous week.

The decline was visible across all the segments. Manufacturing index was down 0.3% week-on-week while Primary articles were down 0.5% W-o-W. Meanwhile the inflation figures for week ended Nov 1 was revised to 8.7% versus 8.98% (provisional).

Inflation has taken a much steeper trajectory on its way back compared to what was being anticipated by most economists. Reserve Bank of India (RBI) was targeting to bring inflation down to 7% by end of 2008 while the current figures are substantially lower than that.

Economists expect inflation to continue its falling rapidly in coming weeks due to lower base effect of last year and decline in excise implemented earlier in December trickling down.

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